Tags: indonesia | tunnel | collapse | probes

Indonesia Union Urges Completion of Tunnel Collapse Probes

Thursday, 23 May 2013 04:17 AM

JAKARTA, Indonesia — All investigations into a tunnel collapse that killed 28 people at the world's No.2 copper mine, run by Freeport McMoRan Copper & Gold Inc in Indonesia, must be completed before workers return, a trade union official said on Thursday.

Arizona-based Freeport suspended operations at the remote Papua mine on May 15, a day after a training tunnel away from its main operations fell in on 38 workers. The closure is estimated to cost $15 million a day in lost production.

Investors fear the accident, one of the country's worst mining disasters, could further strain relations between Freeport and trade unions after a three-month strike in late 2011 and smaller disputes since.

"We will get back to work after all investigations conducted by the government, Freeport and the labor union are completed," Papua-based union leader Virgo Solossa told Reuters. "We still don't know how long the investigation will take, perhaps a few more days to go, I don't know."

Ten workers were saved at the Grasberg mine complex, which also holds the world's largest gold reserves, and company officials said rescuers had retrieved the bodies of all 28 missing workers by Wednesday.

Indonesia's energy and mineral resources ministry is holding an investigation into the accident and has ordered safety checks on all underground mining facilities in the country.

Freeport has said that once rescue efforts are complete it will launch an investigation with the aid of international experts and Indonesian government officials.

The impact of the Grasberg closure on global copper supply has so far been limited as the mine complex keeps stockpiles in reserve in case of disruptions, although that would change if the closure drags on.

The Grasberg mine normally produces around 220,000 metric tons of concentrated ore a day. Around 140,000 tons comes from open pit mining and 80,000 tons from underground operations, the firm said.

With no official estimate of how long the investigations might run, analysts worry the mine could face a prolonged closure. Freeport has said it would only reopen with government permission.

"The important thing now is to give compensation to victims and their families, and then do an investigation," said Syahrir Abubakar, executive director of the Indonesian Mining Association. "After all this is completely finished, maybe Freeport can consider continuing operations."

On Wednesday, Freeport President and Chief Executive Richard Adkerson said the training facility where the accident took place was built in 1998 in conjunction with the development of the Big Gossan mine, whose entrance is about 500 meters distant.

"Had I been there that day, I would have joined our workers in that mine because we had no concern or fears about its safety," Adkerson told a news conference.

One reason for the collapse could be that the tunnel was old and had not been properly maintained, or there could be a problem with the stability of the rock that needs further investigation, said Matt Fusarelli, an analyst at mining and metals consultancy AME Group in Sydney.

"It indicates that there could be more risks associated with the geology and they're going to have to test," Fusarelli added. "This is not a local Indonesian company, this is a big publicly-listed, Western mining company which brings first world safety standards to these mining operations."

Freeport Indonesia's sales are expected to reach 1.1 billion pounds of copper and 1.2 million ounces of gold in 2013, up 54 percent and 31 percent over 2012, respectively.

The rise in sales is due to higher ore grades and a targeted ramp-up in output from underground operations, with open-pit operations likely to be phased out by 2017.

"It does call into question the viability of some of the expansion," Fusarelli added, referring to the tunnel collapse.

© 2017 Thomson/Reuters. All rights reserved.

 
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All investigations into a tunnel collapse that killed 28 people at the world's No.2 copper mine, run by Freeport McMoRan Copper & Gold Inc in Indonesia, must be completed before workers return, a trade union official said on Thursday.
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2013-17-23
Thursday, 23 May 2013 04:17 AM
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